I visited Petersburg this summer. I stayed in town on a couple different occassions. I found an incredible place, well kept, clean and with more comfort and character than any other places I've stayed in town. It's called the Bunk and Breakfast and is hands down my favorite place in town.
You will not find a more friendly and helpful owner. Ryn (owner), has videos, books and an in depth knowledge of Mitkof island and the town of Petersburg. She has a beautiful home, and arriving at the bunk and breakfast feels like visiting the home of a long lost friend. The atmosphere is friendly and comfortable. When I stayed there was always a mix of young and old and we had great meals and shared lots of laughter.
I have travelled in Central America and Europe and would have to say the bunk and breakfast is in a class of its own for the price and accomodations. Do yourself a favor and spend at least one night here before you book rooms at other places in town. I've been to them all and you can't beat this place.
The island by the way is beautiful. Rent a car if you get a chance and head south on the island.

My husband and I are life long Alaskans and we have always been interested in spending more time in SE Alaska. Long story short, I found a leaflet for Alaska Island Hostel on the ferry. The warmth of the hostess and owner of this hostel makes our stay very Alaskan, very comfortable. The facilities for cooking, complete with dishes and common cooking supplies make it easy to put together a meal. The sleeping accomodations are clean and have privacy. Best of all, the interactions with people in and out of the hostel are special. Locals drop in, as do other guests such as my husband and myself. I appreciate the comuter access and phone access since we bought a lot across the Wrangell Narrows. There is much to see and do around the Petersburg area, hiking trails, boating, fishing and awesome scenery. Then, it's great to come back to a clean, reasonably priced, comfortable setting. We would recommend this hostel for anyone coming through Petersburg or the surrounding area.